CMA Final · Indirect Tax Laws and Practice · Time of Supply
Rate of tax on a taxable service changes on 1 October. Vihaan Tech provided the service on 25 September, issued its invoice on 28 September, and received payment on 10 October (credited to bank and entered in books on 10 October). Which is the time of supply under section 14?
The time of supply is 28 September. The service was supplied before the rate change, the invoice was issued before the change, and payment was received after it. In that situation section 14(a)(ii) fixes the time of supply as the invoice date, so the old rate applies.
- A25 September
- B28 SeptemberCorrect
- C1 October
- D10 October
Explanation
Services were supplied before the rate change. The invoice was issued before the change but payment came after it. Under section 14(a)(ii), the time of supply is the date of issue of invoice, 28 September, so the old rate applies. Taking 10 October wrongly applies the payment rule meant for supplies after the change.
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